Turbocharged by acquisitions paid for by money lenders, RSK saw group revenue surge 52% in the year to 31st March 2024 to £1,857m (2023: £1,221m), while net fee income was up 39% to £979m (2023: £704m).
The £13.9m operating loss of 2023 became an operating profit of £8.1m in the 2024 financial year.
However, with interest payments on debts rising from £74m to £143m, the final pre-tax loss for the year was £132.0m, 64% ahead of the 2023’s £80.6m pre-tax loss.
RSK last made a pre-tax profit in 2017, when it turned over just £112m. Since then, it has been focused intently on growth. It has made 100 acquisitions in the past five years alone. Over the same period it has paid out nearly £300m to its money lenders.
There are no plans to change course. Over the next five years RSK expects to grow annual revenues from today’s £1.9bn to £5bn and staff numbers from today’s 15,000 to 40,000. (For comparison, Balfour Beatty has 26,000.)
However with RSK’s net debt rising from £739m to £1,059m between April 2023 and March 2024, some action was taken after the financial year-end.
In June 2024, to raise capital for further acquisitions and to strengthen the balance sheet, RSK received a £500m preferred equity investment from a consortium led by Searchlight Capital Partners, Ares Management Corporation and Penta Capital.
In addition, Ares, its main money lender up to this point, committed an additional incremental £300m debt facility, bringing the total available debt facilities provided by Ares to £1.1bn.
The refinancing was completed in September 2024 with BGF, a shareholder of the group, also providing a further £20m investment, increasing the total equity package to £520m.
This might help explain why RSK has a whopping 28 directors on its board, up from 18 a year ago. (Again for comparison, Balfour Beatty has 10 main board directors; AstraZeneca – the UK’s biggest company by market capitalisation – has 15.)
For RSK founder and chief executive Alan Ryder, everything is going exactly according to plan.
He writes in the 2024 annual report, filed at Companies House this week: “As we look ahead to the next financial year and beyond, the board is excited about the opportunities in front of us. The next financial year will be another year of very significant growth. High levels of organic growth will be achieved as we capitalise on the strong market conditions and drive revenue synergies across the group. Alongside this, RSK will continue to execute its acquisition strategy, bringing specialised businesses into the group to further develop our end-to-end sustainable solutions offering in the core markets of water, energy, infrastructure and the built and natural environment.”
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